Kevin Durant was amazing last night. His line, 36 points (on 24 shots), 10 boards, 3 assists, 3 blocks, 2 steals, was impressive. But his repeated clutch plays at the end of the game were eye-popping. A three to give the Thunder the lead for good. A leaning jumper as the shot clock expired to extend the lead. Clutch free throws. A shot block and a key rebound.

He did all of this despite being exhausted (he logged 44 minutes and playing the entire second half).

Durant and James Harden owned the 4th quarter and the Thunder won a game in which they were clearly outplayed in the first 36 minutes.

Not sure what KD will have in the tank for tonight's game in San Antonio, but Mrs. Angus and I really enjoyed watching him play last night.

Friday, February 03, 2012

Great essay in Inside Higher Ed on how "just be yourself" is horrible advice for academics going out on the job market.

Immortal line: "Sorry Academics; you suck at interviewing".

Mrs. Angus and I very very much emphasize to our students that they absolutely should NOT be themselves and spend a month or two before the job market working with them to project a professional persona. We run them through multiple rounds of practice interviews and practice job talks.

We were lucky this year to each have an excellent student on the market, each of whom had a full dance card at the AEAs and now have multiple campus visits. In fact, both are out on campus interviews right now.

243,000 net new jobs in January (including 50,000 in manufacturing), November & December of 2011 figures revised up by 60,000, unemployment rate down to 8.3%. Details are here.

Not too shabby.

Net new jobs in the private sector were 257,000 so not only is employment rising but its composition is slowly shifting away from government and toward the private sector. In the last 12 months there has been a net job loss in the government sector of around 275,000 jobs

The net jobs figures for the last three months, after revisions, stand at 157,000 203,000 and now 243,000.

It will be interesting to see how the "austerity is killing us" people will spin this.

My good friend Pope “Mac” McCorkle is having a little fun with the reporter from the Chronicle. Here are the money quotes, from me and then his “refutation.”

“They don’t want a candidate who is going to hold [President Barack Obama] back,” Munger said. “Bev Perdue is a clown—she should have never been governor. The only reason she won was the tsunami of Obama’s campaign in North Carolina.”But the unpopularity of an incumbent governor would not likely affect an incumbent president, said Pope McCorkle, visiting lecturer at the Sanford School of Public Policy, who worked as a consultant with Perdue’s 2008 campaign. “[Perdue] had a better shot of winning than is commonly assumed,” McCorkle said. “She got more votes than Obama in 2008. The idea that her victory is solely attributable to Obama doesn’t hold water.”

Now, Mac is a smart guy, and knows full well that that is nonsense. I laughed out loud when I read what he said. There is just no necessary relationship, none at all, between the vote totals and whether Perdue would have won without Obama’s coattails. The reason is straight ticket voting. At least 2% of the folks who went to vote for Obama ended up voting for Perdue straight ticket, but did not vote for Obama at all because of the quirky NC rules.

Democrats from the national party (not the Perdue campaign) organized the straight ticket get out the vote campaign. They handed out cards, and told people (as they were getting off busses paid for by George Soros and his Wall Street pals, Obama fans all) how to vote straight ticket Democrat. (In NC, it takes two votes to vote straight ticket. If you just vote straight ticket, you cast a vote for Gov, but not for Prez. That's not what you meant, but that's what you did).

I watched this happen, dozens of times, at different polling sites. Those folks getting off the bus had NEVER HEARD of Bev Perdue. They were there to vote for Obama, and when some Dem functionary handed them a card explaining how they should vote, straight ticket D, they did it.

Those numbers, 58% of straight ticket votes, and 1.28 million straight ticket votes cast, are by far the largest ever in NC history.

Now, consider just how lame Mac’s “refutation” is. If I’m right, and the straight ticket votes from the Obama turnout machine were the difference in the race, then it would be IMPOSSIBLE for Bev to get fewer votes than Obama. Make it simple: suppose every Obama voter voted straight ticket. And a few others voted for Bev. Then Bev got all those straight ticket votes, and a few more.

That’s basically what happened. Bev “beat” Obama by four thousand votes. Statistically a tie. But without Obama and the straight ticket votes, Bev would have gotten wiped out by Pat McCrory. On election day, when far fewer people voted straight ticket, Pat “won” easily. On election day, the votes looked like this:

In other words, Perdue built up an early lead of 300,000 because of all that straight ticket turnout for Obama. In a normal year, with average turnout and average straight ticket voting rates, Bev would only have gotten 1,000,000 early votes, and would have lost the election by 250,000 votes or more.

Obama volunteers. Not Perdue volunteers. And Perdue only won because of early voting. Perdue couldn't possibly have gotten fewer votes than Obama, because all those early votes were for BOTH. Perdue loses, without Obama. And my friend Mac is laughing at that reporter, for not asking better questions. Good one, Mac.

Wednesday, February 01, 2012

Here's something to chew on: When Obama set a precedent for campaign funding by breaking his promise in 2008 to accept public funding for the general election he may have done more than Congress or “reformers” ever could to reduce the impact of SuperPACs in the 2012 general elections.

The public funding option in 2012 would constrain a campaign to roughly $90 million in total spending, a tiny fraction of the $1 billion the president hopes to raise privately for his campaign. If the Obama campaign could only spend $90 million we can only imagine how much money would flow into SuperPACs to make up the difference. Don’t for a minute think that there will be no SuperPACs supporting Obama, but it is the case that we will hear relatively far more directly from the campaign than from 3rd parties this fall (a good thing for our democracy, I believe, to hear more from candidates directly). The same goes for the GOP, whose candidate I cannot imagine agreeing to public funding.

Bottom line: If you don't like what SuperPACs are doing to election messaging then (have yet one more reason to) be happy that the public funding system has collapsed…

From Tommy the Tenured Brit, an example. I have adapted it for teachers of Econ 101: This is a fine little problem to give in class, complete with video. The essentials:

Bridge revenue is tax-free, by law

Bridge toll is 80 pence, for multiple passages per day

Bridge revenue is 2,000 pounds per week in the busy summer, less in winter. About 80,000 pounds per year

Owner is responsible for upkeep and repairs on bridge and toll machinery, cost 15,000 pounds per year

Bridge "comes with" cottage, land, and fishing rights

The bridge just traded hands at a price of 400,000 pounds.

1. What is the implied discount rate (assuming that the bridge (with repairs), the tolls, and the tax break are all perpetual)
2. Now assume that tax break is eliminated, the discount rate is the same as for #1, and that the effective average tax rate on the owners is 40%. What would be the predicted change in price, or the capital loss the owners would be stuck with?
3. Are the owners making a supernormal return because of the tax break?

Unless I have got me sums wrong, the answers are:

1. 16.25%
2. New price would be 243,750 pounds. So the tax break is worth 156,250 pounds
3. Of course not! The tax break is the reason that the bridge was worth 400k instead of 243k pounds. But the implied rate of return is the same, because the tax rate is capitalized into the value.

Tuesday, January 31, 2012

1. By most measures, real wages are up slightly since 1976. If anything, these measures understate the actual increase in consumption by a lot. How much did your hipster OWS kid's MacBook Pro cost in 1976? How about his iPad? How about his MP3 player? (Hint: infinity, infinity, infinity). Stuff has gotten WAY better, and cheaper at the same time. Attempts to control for hedonics, quality change, and innovation are notoriously difficult. How would you build Moore's Law into a CPI adjustment, when it implies prices of computer power are constantly falling at a rate of more than 25% per year? But these clearly lead toward understating the effective real wage increase. Even if I only have a minimum wage job, I can save up and buy an iPod. In 1976, I could not.

So, for example, here is the cost of a 1-gig hard drive (picture for RAM same dynamic):

(The vertical scale is not linear, so the fall is even more dramatic. This stuff is nearly free. Enjoy your capitalism!)

Check this RAM chart out. It even freaked me out a little bit, and I'm an optimist already. Wow, does RAM ever get cheap!

2. Health care benefits have soaked up real annual gains of 4% or more, on average. If you include total compensation, not just wages, workers have gotten huge gains. (Of course, this is a problem, but it is a DIFFERENT problem than the one pointed out by Dr. Reich.)

3. It really is absurd that people think wages have not gone up, for John Smith the worker, hired in 1976. He makes a LOT more now (though he may have lost his job, which is a DIFFERENT problem than the one pointed out by Dr. Reich). Wages rise with job tenure, they just do. John Smith makes pretty good money now. The new guy just being hired, sure, he doesn't make much more than John Smith did in 1976, adjusted for inflation. Not sure why that is surprising, or even bad.

(UPDATES: a. Joe Thacker is right. Immigration and women entering the work force are huge factors. b. On the video on YouTube, a commenter said something so true and funny I peed myself: "I agree with this guy﻿ but it looks like he took 3 hits of acid before doing the vid." Yes, friends, it is true that D-Bood is likely to be cast as the psycho-murderer, not the RCMP hero.

So, visited Tommy the Tenured Brit. Ate kidneys, venison, baked-tomatoes-for-breakfast, and had a whole lot of pints of room temperature flat beer in little places the getting to which involved driving like hell in the dark on roads just wide enough for oxcarts, on the wrong side of the freakin' road.

But the oddest thing? The oddest thing was clearly the zombie shrimp dish at the Horse and Groom.

Okay, technically that's a zombie langostino, rising from beneath the pie crust to langost the whole earth. And, they didn't call it "zombie shrimp." They called it "Rabbit and Langostino pie." But wouldn't that shrimp give most little kids nightmares?

I support high employment in manufacturing. The reason is that I believe that people are paid more if they work in manufacturing than if they work in other sectors.

And the following:

People get something for nothing if they switch from employment in services to employment in manufacturing -- well the data show they lose big if they move the other way.

This guy is saying that there are, in his words, "labor market rents" in the manufacturing sector.

I think what the recent evidence shows though is that there WERE labor market rents in the manufacturing sector.

These rents came from the power of unions. But (1) they weren't a free lunch, as they were partly paid for by higher prices to consumers. (2) These rents are, to a large extent, gone. Virtually every story I've seen about new manufacturing jobs talks about the two-tiered wage schemes where the incumbent workers earn the higher wages and better benefits and the new workers get significantly lower hourly wages and weaker benefits.

Globalization is bringing this about and it's not going to go away. "Labor market rents" to unskilled (and indeed many skilled workers) are not sustainable as more and more countries join the global system.

I see little benefit in glamorizing and subsidizing manufacturing jobs in a specific way, as they are more and more $15/hour positions with limited upsides.

Of course, I don't even agree with the general notion that the government should be actively planning where its citizens will work.

I do see a role for subsidizing basic research. I have views about subsidizing the acquiring of skills, but my position in academia probably makes them suspect so I'll just leave that alone.